More Articles

The Dispatch E-Edition

All current subscribers have full access to Digital D, which includes the E-Edition and
unlimited premium content on Dispatch.com, BuckeyeXtra.com, BlueJacketsXtra.com and
DispatchPolitics.com.
Subscribe
today!

By Joseph PisanAssociated Press • Monday April 7, 2014 2:26 AM

NEW YORK — When Oliver Housknecht gave Oculus VR $25 through crowdfunding website Kickstarter
two years ago, he wanted to help a startup grow into a larger, independent company. Instead, it
became part of one.

“Why do they need my $25 now?” said Housknecht, who does technology work at a hospital in Kansas
City, Kan.

Crowdfunding websites such as Kickstarter, Indiegogo and Peerbackers provide a way for people to
donate to a variety of things, including community projects, vacations, independent films and even
small companies. On Kickstarter alone, users have pledged to give more than $1 billion since it
launched in 2009.

The backlash over the Oculus deal puts a spotlight on the people who donate with no expectation
of a financial return to businesses as varied as bakeries and makers of smartphone apps that aim to
turn a profit someday. It also highlights the tension that could arise when those funders disagree
with a company’s decisions.

The Oculus Kickstarter page was ablaze with outrage after the Facebook deal. Some donors —
including people who gave $300 or more — argue that Facebook will ruin Oculus. Others say that
Facebook, with a market value of $145 billion, doesn’t need their hard-earned cash.

So why then do people donate to a company that has the potential to strike it rich and to give
little, or nothing, in return?

Many want to feel like they are part of creating something new and exciting, said Paul Levinson,
a professor of communications and media studies at Fordham University in New York City. Most of
that is imagined. Funders have little say over how a company is run. That harsh reality can create
a feeling of betrayal.

“They’re psychologically robbed of the illusion of being part of a company,” Levinson said.

Representatives of Facebook and Kickstarter declined to comment for this story.

Crowdfunding websites make it clear that backers have no control over what comes of the project
they fund. Some projects offer T-shirts or an early prototype of a gadget or other items, depending
on how much is donated.

Meaghan Fitzgerald, the head of marketing at social network 23snaps in London, said giving $75
to fund the
Veronica Mars movie made her feel like a part of creating it.

The actual creators of
Veronica Mars raised $5.7 million through Kickstarter last year to turn the former TV
series into a movie. Producers sent backers frequent updates on how filming was going. Fitzgerald
also has received a copy of the movie, a poster, a T-shirt and a copy of the script.

She said she’s happy with what she got, even if the movie earns millions. “It’s very clear what
your reward is. There’s no miscommunication.”

People who want more from their funding dollars might have an option soon. The U.S. Securities
and Exchange Commission is working on rules to let startups sell stock to small investors through
the Internet for the first time. That would give small-time investors real ownership.